Natural Resources Committee on Nov. 25th, 2013

[Christiane Villemure]

Mr. Chairman, NRCan is not generally involved in exploration activities per se. The Geological Survey provides geoscience analysis and data that is put into the public domain and can be used by prospectors and explorers to help them identify and define deposits. NRCan is involved in the scientific aspects of the processing of mining various commodities, including the rare earths.

[The Chair, Conservative, Leon Benoit]

Thank you.

We go now to Ms. Crockatt, followed by Mr. Cleary.

Go ahead, please, Ms. Crockatt.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thank you both very much for being here at committee. This is very interesting. It is an area that is new to most of us, so we are at the beginning—at the pre-feasibility study phase of the committee.

I'm trying to get a bit of a handle on what the opportunity is with this resource, rare earth metals. Can you equate it with some of the other natural resources we have in Canada, such as oil, gas, uranium, potash? Where would rare earths stand in terms of potential?

[Christiane Villemure]

Mr. Chairman, I can answer this question.

The rare earth industry is very small. Probably a small number of mines will move into production. Rare earths are critical in specific applications, and this is what makes their study, and the advancement of projects, so important.

For example, the Critical Materials Institute in the United States has identified source diversification for rare earth in order to identify safe resources they could tap into to feed the manufacturing industries in the U.S.

The Critical Materials Institute is very interested in Canadian projects and in collaborating on the scientific aspects of rare earth to identify new sources and to potentially look at how supply chains could be strengthened by greater collaboration between the two countries, which are neighbours.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Okay.

You're basically saying that this is quite a minuscule resource, but it may be very important in terms of security of supply.

[Christiane Villemure]

This is correct.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Okay.

In terms of security of supply, did I hear you say that Canada has a substantial part of the world's supply of rare earth minerals? Can you go back over that for me?

[Christiane Villemure]

Yes.

Mr. Chairman, what I mentioned is that among those projects listed on slide 10, and looking at their anticipated production rate, the Canadian potential could go as high as 50% of the global demand.

[Joan Crockatt, Conservative, Calgary Centre, AB]

That's wonderful. Thank you. That's sealed in my memory now.

If we're talking about this as being a security-of-supply issue, what about the economics? It's not necessarily the Government of Canada's role to develop every resource, but we do want to make sure we are giving appropriate attention to those resources and that it makes sense for industry, or for the benefit of our country, to move forward with.

It may be too early to know, but can you tell me what the economics of rare earth metal mining and refinement in Canada are?

[Christiane Villemure]

Mr. Chairman, I will attempt to provide an answer to this question; it is a difficult question.

The cost of developing a rare earth mine, like any mine of that size, would probably be in the order of $1.5 billion.

Rare earth materials feed essential supply chains, and the economics of this are not very well known. In fact, there are a number of studies going on in the United States to understand what part rare earths are responsible for in the big supply chains dealing with the automotive industry, high tech, or electronics—those industries.

Even though the prices of rare earth could go up, at the end of the day, the minuscule amounts of rare earth contained in those products do not make a major difference in the price of the end product. The impact is on the capacity of that product to meet client needs, what we have come to expect of the various apparatus we use every day—our cars, our cellphones, our laptops, and our screens.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Therefore, this may be a strategic resource to develop.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Crockatt. Your time is up.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thank you.

[The Chair, Conservative, Leon Benoit]

You may have another opportunity, if you'd like.

Mr. Cleary, you have up to five minutes, please.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Thank you, Mr. Chair.

First a question of clarification: you mentioned at the beginning of your presentation that there is an ongoing study of rare earth mining. Did I hear that correctly?

[Christiane Villemure]

We regularly follow the rare earth industry and the rare earth markets. Studies are mostly concerned with the science. We are aware of a number of studies being conducted in the United States that focus more on supply chains or the economics.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

So there's no ongoing study right now into rare earth mining?

[Christiane Villemure]

Mr. Chairman, I'm a bit lost in regard to answering that question. The science that we are doing is about rare earth mining. It's trying to find out and address a number of issues that are associated with processing the ore and concentrating the rare earths into products that can be put on the markets, just like we would have to do for zinc, copper, or gold, for example.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

My apologies, then, as I thought you said there was an ongoing study of rare earth mining. I'll move on from there.

My riding is in Newfoundland and Labrador. We have deposits of rare earths in Labrador. We also have deposits of uranium, for example. Until recently, there was a moratorium on uranium mining and exploration. Do you usually find deposits of rare earth near uranium deposits?

[Christiane Villemure]

Mr. Chairman, I can take this question, but I'm sure my colleague will want to add to this.

Rare earths are often found with radioactive material, sometimes uranium. The Pele Mountain project in Elliot Lake in Ontario is one such project. This mine used to be a producing uranium mine. Rare earths are found in the deposit, and this project is now looking at a mechanism to be able to put rare earths on the market—

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

I'm sorry to interrupt, but when you mention that the Canadian potential is 50% of global demand, can you say how much of that Canadian potential is in eastern Canada/Labrador specifically?

[Christiane Villemure]

I wouldn't be able to answer that specifically, but it is something we can find out.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Another question is in terms of how rare earth mining compares to other mines in terms of safety, such as, for example, the safety of handling tailings and that sort of thing. Where does rare earth mining rank? In other words, iron ore might be the safest, all the way down...where would rare earth rank?

[Christiane Villemure]

Mr. Chairman, it's a difficult question to answer. I can risk an answer.

The major concern we hear about rare earth mines is associated with radioactivity, mainly thorium. It's sometimes uranium, but most of the time it's thorium. Thorium is less nasty and less radioactive than uranium.

So far, the data we have indicate that most Canadian deposits do not have high concentrations of radioactivity. They are at levels that need to be managed in any case, and the environmental assessment process normally helps to identify what's in the deposit and how to manage it. It's the company that will have to develop a plan to be able to do that.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

In terms of handling those potentially radioactive tailings, where do the regulations of the Government of Canada stand in comparison to regulations for rare earth mining around the world? Obviously they're better than China's, because other countries have been so critical of China.